The dragnet closing in on a massive European tax fraud scheme has reached a critical juncture, as Jornal de Notícias reported.
The Mechanics of a 150-Million-Euro Carousel
At the center of the ongoing judicial crackdown—designated as Operation Hermes—lies an intricate Value Added Tax (VAT) carousel scheme centered on the cross-border trade of mobile phones. According to details from the European Public Prosecutor’s Office, the Portuguese Judiciary Police (PJ), the Tax Authority, and the GNR, the operation spans multiple municipalities including Arruda dos Vinhos, Vila Franca de Xira, and Torres Novas, as O Mirante detailed. Investigators uncovered commercial spaces and warehouses functioning as empty shells without a single active employee, serving merely to facilitate fraudulent paper trails.
The illicit network allegedly utilized roughly 150 frontend companies scattered across various European Union member states. By orchestrating rapid, successive transactions of mobile devices across borders, the conspirators systematically exploited the VAT exemption rules for intracommunity trade. This allowed the network to collect improper state refunds while ultimately dumping the consumer-end sales. Authorities estimate the broader scheme drained approximately €150 million from public coffers across parallel inquiries, with specific scrutiny falling on the Castro Eletrónica for moving an estimated €42 million and generating some €11 million in simulated business invoices and favor receipts since 2023.
Straw Men and Luxury Seizures
Investigators point to the “Boss” of Almada as the man who provisioned these shell entities, relying on a vulnerable network of straw men. These figureheads—recruited with paltry sums of a few hundred euros while facing severe financial hardship—included Romanian, Pakistani, Guinean, Belgian, and Spanish nationals, many of whom have since fled Portugal.
While these nominal directors lived on the margins, the primary targets enjoyed the spoils of state-funded tax evasion. The illicit millions bankrolled an extravagant lifestyle, funding high-end luxury vehicles including Porsche and Lamborghini models. As the dragnet tightened through coordinated nationwide searches, authorities secured sweeping asset freezes: 26 properties, stakes in 18 corporations, 80 standard vehicles, four high-cylinder automobiles, luxury goods, substantial cash reserves, and multiple bank accounts.
The detained suspects, numbering 39 individuals aged between 30 and 60, face severe allegations including criminal association, tax fraud, and money laundering. The judicial system moves to dismantle a transnational web that turned cellular device distribution into a lucrative pipeline for grand fiscal pillaging.
